2023 (3) TMI 721 - AT - Income Tax

Additions u/s. 69C as unexplained investment - assessee purchased jointly with Shri Pradeep Parmar who was a cousin of the assessee and agricultural land for the total consideration - HELD THAT - The assessee through bank details and the details given by the co-owner established that at the time of the transaction the assessee paid only Rs. 21, 68, 000/- though his share was 50%. This aspect was totally overlooked by the AO. AO ignore the statement given by the co-owner that is cousin of the assessee and simplicitor made addition. AO presume that the assessee paid his share of purchase price but from the records the same appears to be that the assessee at that particular time paid only and the balance was paid by the co-owner Shri Pradeep Parmar. The co-owner i.e. Shri Pradeep Parmar also established the source of the said amount of Rs. 1 crore thereby stating that the same was borrowed from Shri Kanjibhai Fulabhai Koli and to that extent has given the details that GIDC has compensated to Shri Kanjibhai Filabhai Koli and from that fund the co-owner received a loan from the said party. This crucial aspect were not taken into account by the AO as well as by the CIT(A) and ignored the evidences produced by the assessee. Thus the addition made by the Assessing Officer does not sustain. Hence appeal of the assessee is allowed. Penalty u/s 271(1)(c) - HELD THAT - The assessee has given explanation about the addition of Rs. 42, 84, 150/- to the Assessing Officer and as the assessee has paid only Rs. 21, 68, 000/- at the time of transaction and his cousin paid the rest of the amount. Thus the invocation of Section 271(1)(c) of the Act was not justified by the Assessing Officer. Hence the penalty under Section 271(1)(c) does not sustain.

Summary

Issues involved:
The judgment involves issues related to additions made under Section 69C as unexplained investment for Assessment Year 2012-13 and the confirmation of penalty under Section 271(1)(c).

ITA No. 1145/Ahd/2017 (A.Y. 2012-13):
The assessee challenged the addition of Rs. 42,84,150/- as unexplained investment under Section 69C. The Assessing Officer observed discrepancies in the purchase of a property jointly with a co-owner. The CIT(A) partly allowed the appeal. The assessee contended that the co-owner had contributed towards the purchase, supported by evidence. The Assessing Officer's presumption was refuted, and the burden under Section 69/69A was highlighted. The Tribunal noted the evidence presented and allowed the appeal, emphasizing the overlooked aspects by the Assessing Officer and CIT(A).

ITA No. 177/Ahd/2019 (A.Y. 2012-13):
The appeal challenged the penalty of Rs. 10,95,120/- imposed under Section 271(1)(c) for the unexplained investment addition. The assessee argued against concealment, stating correct income declaration. The Tribunal considered the explanation provided by the assessee regarding the investment, emphasizing the lack of justification for invoking Section 271(1)(c). Consequently, the penalty was deemed unjustified, and the appeal was allowed.

Conclusion:
In a combined result, both appeals filed by the assessee were allowed by the Tribunal, emphasizing the importance of considering evidence and justifications in tax assessments and penalty impositions.